The current low volume within current crypto market conditions has led the Central Bank of Russia to declare that cryptocurrencies do not pose risk to global financial stability.
Russia has been looking into cryptocurrencies for a while now. Recent developments include the Russian State Duma approving the first reading of regulation legislation for the crypto industry, which defined cryptocurrencies as property as well as rules for dealing in the space. Other developments include last week’s announcement by the Russian bank Sberbank CIB where they announced the countries official ICO launch. Igor Bulantsev, president of Sberbank CIB, said that the Russian ICO market is “highly promising,” and that banks are interested in the idea of using their own ICOs for fundraising.
Yesterday, the Central Bank of Russia released a research paper in which they presented their findings on the threat of cryptocurrencies to the global financial system. The report argues that the transaction volume is the crypto space is too low to be a threat to global financial stability.
The paper also indicates that usage of the term “cryptocurrency” should be replaced with “crypto asset” because of the assets application of distributed ledger technology and cryptography.
Since the paper argues that the market is too small to cause a threat, it does explain that if the volume and market size were to increase, crypto assets would fail to establish themselves as a store of value capable of replacing fiat since they would be too volatile. The paper also notes that crypto assets are risky since there a few investor protection and that crypto assets can be used for money laundering and terrorism financing.
Russia will likely continue to develop their opinion on crypto assets. Declaring that it is not a threat is a step in the right direction, but they do seem skeptical about how crypto assets can and will be used in the future.